San Francisco Pres. Mary Daly is speaking on Bloomberg television:
- Some increase in policy rate above neutral is likely to be required in 2023
- Sees neutral rate at 2.5%
- Want to march rates to about 2.5% at least, and then perhaps move above it
- If inflation comes down, we might find just a little restrictive is just right
- If inflation moves up, will need to be more restrictive
- We are prepared to do whatever it takes to get price stability
- Fed policymakers project front loading of rate increases
- Balance sheet adjustments would also deliver at least another rate hike worth of tightening
- This is quite a bit of frontloading compared to prior cycles
- Data will tell us a 50 basis point is the right recipe
- Conflict is a modest risk to growth, but would not deliver stagflation
- Too early to call we will have a global recession
- Very limited chance of US recession
Yesterday Daly said that she doesn't see inflation at 2% at the end of the year (no kidding). You can see some further comments by clicking here.